This is a great reminder that operational efficiencies can only take a company so far. Applying technology to Marketing and Sales means producers can reach more customers and reduce cost-to-serve.
The chemical industry is at a crossroads. Faced with market unpredictability, increased regulations, and products that are quickly moving toward commoditization, it is becoming increasingly difficult to maintain reasonable margins. A few companies are finding success by developing breakthrough products, but true revolutionary innovations are hard to uncover.
Instead, most chemical manufacturers have responded by reducing costs with operational efficiencies. One area that is often overlooked, however, is sales and marketing. This department continues to deploy traditional approaches to selling, despite rising expenses. In fact, a recent study from McKinsey indicates that average sales, general, and administrative (SG&A) costs increased by as much as 10% over the last decade.
Fortunately, new technology solutions and data analytics are offering surprising models for selling products and related services. With these new strategies, chemical companies are finding it is possible to preserve margins while adding new revenue streams.
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